Warren: In only a few years, the common ground in Canada to work for economic fairness seems to have evaporated

Four years ago I wrote an opinion piece arguing capitalism had the capacity and time to civilize itself. It survived the Great Depression because it has the inherent ability to reform itself — in its own self-interest.

Now, I’m not so sure.

I thought the captains of capital had a vested interest in ensuring the workforce had the means to buy their products and services. As Henry Ford famously said, “The owners, the employees and the buying public are all one in the same.”

But since the 2008 recession, economic recovery has been slow for most Canadians. Persistent wealth and income disparity has constrained consumer demand.

One per cent of Canadians are earning 15 per cent of total income. Twenty per cent own nearly 70 per cent of the wealth. Meanwhile, more than 50 per cent of Canadians are $200 or less away from not being able to pay their bills.

Some corporate leaders recognized the dilemma. A 2012 Bloomberg Poll found 75 per cent of them believed capitalism was “in trouble.” Thirty per cent said it needs a “radical reworking of the rules and regulations.”

Meanwhile, progressive governments in Canada promised greater fairness in income tax, labour standards and social programs as ways to bring the disenfranchised back into the economic mainstream. There seemed to be common ground for civilizing capitalism in Canada.

Fast forward to today and this common ground has evaporated. Business doesn’t seem to get the bigger picture.

A country with more than a quarter of its workforce earning less than $15 an hour is a country flirting with political extremism. Business hasn’t acted, so governments have had to intervene, maybe too aggressively.

The federal government and some provinces are moving to shore up the middle class and bring more low-income workers into the economic mainstream. Business leaders and professionals feel the collective impact on their bottom line and personal after-tax income is too much too soon. As a result they are fighting proposed reforms to the federal tax system and provincial labour standards at every turn.

Two things need to happen. Governments need to introduce longer phase-in periods for their reforms. Business needs to look past its immediate concerns to the political stability these reforms will bring longer term.

I can understand why business feels it is being overwhelmed. An Ontario golf course owner told me he will have to adjust to a 32 per cent increase for his minimum wage workers over 18 months to $15, plus pay some additional benefits. That will also prompt his workers already making $15 to want a raise.

On top of this, the owner is paying more federal and provincial personal income tax as a result of recent federal and Ontario taxes on high-income earners. And now the federal government is proceeding with legislation that will prevent him from using his company to split income among his family and enjoy a low tax rate on passive income within his business.

Ottawa and Queen’s Park should follow the lead of the new NDP government in British Columbia. It’s giving employers more time to adjust by phasing in a $15 minimum wage over the next four years.

Meanwhile, the business and professional groups that are allied against the Trudeau and Wynne governments are forgetting something fundamental. It’s what can happen if we ignore the frustration of those millions in our society who feel the game is rigged in favour of the rich.

The de-facto leader of the Western world, Angela Merkel, has just won a hollow victory in Germany. An emerging right-wing, anti-immigration party made major inroads. And in France, the National Front, a right-wing, populist, anti-immigration party also made historic gains in recent elections.

The majority of those who voted for Britain to leave the European Union live outside the London bubble. They are mainly low- to middle-class workers who thought leaving the EU might somehow improve their economic well-being. It’s not clear how that will happen with Brexit.

Donald Trump’s unlikely win was fuelled in part by a coalition of overlooked blue-collar and working-class white voters. For many of them the American Dream has passed them by. Unfortunately their anger has found a voice in a pathological president who’s unlikely to ease their pain. Instead he’s bringing us all closer to nuclear war.

In this country the membrane that divides us from this kind of divisive, extremist populist politics is thinner than many think. It must be infuriating for the nearly five million Canadian workers making less than $15 an hour to watch the expensive media campaigns of the well-off claiming they can’t share any more of the dividends from our prosperous economy.

We have to find ways to reverse the rising income and wealth disparity in Canada without crippling entrepreneurship, initiative and investment. If we fail to civilize how capitalism functions in this country, we risk destabilizing our democracy and descending into political chaos.